Market Perspective

Public Market Performance

Sector Spotlight

Q3 M&A Activity

Business Consulting – Q3 2017

Ready for Another “School” Year

The D.C. traffic is back in full force, our newest financial analyst class has arrived to

start their careers at Clearsight, and business is resuming its normal, fast clip post-

summer. The fall always feels reminiscent of that old back-to-school momentum, but at

Clearsight, we are literally going back to our schools. Fall brings with it our recruiting

season, so the Clearsight team has been traveling back to our alma-maters to find the

next crop of investment bankers to join our ranks.

Recruiting is very important to us, just as it is to many of our clients. As a financial

advisor to top-tier consulting firms, we have had a unique lens on some of the best

recruiting and training engines in the world. We have learned a lot from our clients about

the importance of recruiting, talent, and culture initiatives. There is a huge opportunity to

generate value in a consulting business by creating highly repeatable, procedural,

documented processes for getting new team members in the door, up to speed, and

then retaining them. By “value” we don’t just mean the value in streamlining your day-to-

day initiatives and making your life easier as a business leader – we mean tangible

value for your equity upon the sale of your business. Strategic and financial buyers alike

are more comfortable with human capital businesses when there are tried and true

processes around talent. After all, with most consulting firms, talent is the only

substantial asset changing hands.

A textbook example of a company with a well-oiled talent engine is our client, IBB

Consulting Group, which announced their acquisition by Accenture in early September.

IBB is a premier consulting firm that helps leading broadband and mobile operators,

media companies, and technology providers identify emerging industry shifts, adapt to

market changes, and capitalize on new business and technology opportunities. IBB’s

leadership did a phenomenal job creating a platform that was personally, professionally,

and financially rewarding to its employees. Paired with thoughtful recruiting efforts, this

allowed the Company to hire the best technology, media, and telecommunications

(“TMT”) consultants in the industry. IBB will now bring their tremendous pool of talent to

Accenture, to enable Accenture Strategy to better advise the biggest TMT players in the

world on the central opportunities and challenges they face. In the knowledge economy,

never underestimate the importance of talent, and the power of a unified and

enthusiastic team.

Greg Treger Co-Founder &

Managing Director

Email Greg

(Control + Click to email)

PUBLICMARKETS

2

Business Consulting Comparable Companies Analysis

LTM EV / Revenue Multiple Trend – 3 Years

CLEARSIGHT MONITOR | Business Consulting Industry | Q3 2017

LTM EV / EBITDA Multiple Trend – 3 Years

Source: Capital IQ, market data as of 30-Sep-2017

Source: Capital IQ, market data as of 30-Sep-2017

Note: Multiples charts may differ from Comparable Company Analysis figures due to detailed adjustments made to the Comparable Company Analysis.

Source: Capital IQ, market data as of 30-Sep-2017

Closing % of 52 Equity LTM

Price Week Market Enterprise EV / Revenue Multiples EV / EBITDA Multiples EBITDA

Business Consulting 30-Sep-2017 High Cap Value LTM 2017 2018 LTM 2017 2018 Margin

Accenture $ 135.07 97.4 % $ 89,871 $ 86,527 2.5 x 2.4 x 2.2 x 14.6 x 14.2 x 13.0 x 17.1 %

Cap Gemini 117.20 96.9 20,247 22,803 1.6 1.5 1.5 12.4 11.2 10.5 12.7

CBIZ 16.25 98.5 923 1,108 1.3 1.3 1.2 12.1 10.6 9.8 11.0

CRA International 41.05 98.2 382 368 1.1 1.0 1.0 12.5 11.4 10.6 8.6

Franklin Covey 20.30 90.4 287 322 1.7 1.7 1.5 NA NA NA 3.8

FTI Consulting 35.48 75.3 1,419 1,762 1.0 1.0 1.0 11.8 9.1 8.5 8.4

Heidrick & Struggles 21.15 78.0 415 356 0.6 0.6 0.6 6.4 6.7 6.2 9.3

Huron Consulting 34.30 56.6 789 1,175 1.6 1.6 1.6 10.5 11.3 10.5 15.3

ICF International 53.95 90.6 1,051 1,320 1.1 1.1 1.0 11.5 11.3 10.5 9.6

Korn Ferry 39.43 98.3 2,244 2,205 1.4 1.4 1.3 11.2 9.1 8.4 12.3

Navigant Consulting 16.92 60.7 831 1,009 1.1 1.0 1.0 7.6 7.4 6.9 13.9

Resources Connection 13.90 70.2 425 427 0.7 0.7 0.7 10.9 11.3 10.2 6.7

High 98.5 % $ 89,871 $ 86,527 2.5 x 2.4 x 2.2 x 14.6 x 14.2 x 13.0 x 17.1 %

Median 90.5 877 1,142 1.2 1.2 1.1 11.5 11.2 10.2 10.3

Mean 84.3 9,907 9,948 1.3 1.3 1.2 11.0 10.3 9.5 10.7

Low 56.6 287 322 0.6 0.6 0.6 6.4 6.7 6.2 3.8

0.8 x

0.9 x

1.0 x

1.1 x

1.2 x

1.3 x

Sep 2014 Mar 2015 Aug 2015 Jan 2016 Jun 2016 Nov 2016 Apr 2017 Sep 2017

Business Consulting Index

1.2 x

7.0 x

8.0 x

9.0 x

10.0 x

11.0 x

12.0 x

Sep 2014 Mar 2015 Aug 2015 Jan 2016 Jun 2016 Nov 2016 Apr 2017 Sep 2017

Business Consulting Index11.1 x

3

Business Consulting Market Index Performance

Share Price Performance Q3 2017

CLEARSIGHT MONITOR | Business Consulting Industry | Q3 2017

Source: Capital IQ, market data as of 30-Sep-2017

Source: Capital IQ, market data as of 30-Sep-2017

PUBLICMARKETS

90%

95%

100%

105%

110%

115%

120%

Sep 2016 Dec 2016 Mar 2017 Jun 2017 Sep 2017

S&P 500 Business Consulting Index

17.1 %

13.6 %

(20.6)% (14.4)% (2.8)% 1.5 % 1.5 %5.2 %

8.3 % 9.2 %13.0 % 13.5 % 14.2 % 14.5 %

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Accenture: The Most Active Consulting Acquirer

CLEARSIGHT MONITOR | Business Consulting Industry | Q3 2017

SECTORSPOTLIGHT

4

With nearly 50 acquisitions over the past two

years, Accenture has emerged as one of the

most acquisitive consulting firms in the industry

The Company’s acquisition strategy has

revolved around a number of key themes, most

notably:

― Cloud: Accenture has made a number

acquisitions as part of their Cloud First

agenda, bolstering their capabilities across

various cloud platforms, among those being

Salesforce, ServiceNow, and Workday

― Digital: A heightened focus has been placed

on building out the Company’s Digital

practice; in an area once ruled by agencies,

Accenture’s investments in digital service

providers and consultancies highlight their

commitment to this industry as more and

more companies look to transform the way

they do business through digital initiatives

2 25

3

9

2

55

9

2 5

4

7

3

3 2

4

5

9

14 14

34

FY2013 FY2014 FY2015 FY2016 FY2017

Cloud Consulting Digital Technology Other

M&A Breakdown – 5 Fiscal Years

Financial Performance – 5 Fiscal Years ($bn)

$ 28.6

$ 30.0

$ 31.0

$ 32.9

$ 34.9

16.3 % 16.3 %

16.6 %

16.8 %

17.1 %

FY2013 FY2014 FY2015 FY2016 FY2017

Revenue EBITDA margin

Select Strategy Consulting Transactions (Last 2 Fiscal Years)

Commentary on Rationale

Source: Capital IQ, market and M&A data as of 30-Sep-2017

Note: Fiscal year ends August 31.

Interactive Broadband Consulting Group (“IBB”) is a provider of

consulting services for broadband, mobility, media, and

technology companies

IBB Consulting strengthened the ability of Accenture Strategy to

advise clients in the Communications, Media, and Technology

industries

Target Date Deal Commentary

Sep 2017

Mar 2017

Sep 2016

First Annapolis Consulting is a provider of payments consulting

and advisory services

Accenture gained payments expertise in several international

markets through the acquisition

Kurt Salmon is a strategy consulting firm focused on the retail

industry

The acquisition expanded Accenture’s capabilities in delivering

end-to-end strategy consulting services to retailers and private

equity firms

“Retail and consumer goods companies are among the

most affected by digital disruption. Millennial consumers

in particular expect digital interaction and a personalized

customer experience. To meet the future needs of these

digital consumers, retail and consumer goods clients are

rethinking their commercial operating models and require

increasing support for digital transformation.”

- Michael Brueckner

Managing Director, Accenture

Austria, Switzerland, and Germany

“Our clients are eager to adopt As-a-Service operating

models as they fuel their innovation through cloud.

Accenture’s Cloud First approach enables us to offer

clients the latest capabilities for an easier and more

efficient path to cloud adoption.”

- Jack Sepple

Sr. Managing Director,

Accenture Cloud & Accenture Operations

“Disruption introduced by connected products and the

IoT is re-writing the old rules of a product-based business

model, forcing manufacturers to transform to deliver

value-added services and deliver meaningful outcomes

for consumers.”

- Brian Doyle

Managing Director - Accenture Connected

Product Innovation

“Experience is the new battleground in the digital world

and brands need to continuously optimize it across the

entire customer journey. At Accenture Interactive, we’re

laser focused on creating the best customer experiences

for our clients…”

- Glenn Hartman

Group Head - Accenture Interactive

North America

Announced Target Buyer Target Description / Deal Rationale

09/28/2017

Certeco, a business change management consultancy in the U.K., merged with P2

consulting, a provider of project and program management consulting services and

portfolio company of Lonsdale Capital Partners

The combination of the companies helped them provide a broader range of consultancy

services to the market

09/28/2017

Lyons Consulting Group (“LYONSCG”) is a digital and global commerce service provider

with deep expertise in Salesforce Commerce Cloud

The addition of LYONSCG enhanced Capgemini’s capabilities in a number of areas

including digital strategy, experience design, and ecommerce implementation as the

Company looked to bolster their digital commerce advisory platform through the

acquisition

09/07/2017

TandemSeven is a customer and digital experience innovation consulting firm

The acquisition of TandemSeven boosted Genpact’s design thinking capabilities and

extended their ability to help clients provide a seamless experience from the front office to

the back office

09/06/2017

Global Insurance Management Company provides consultancy services to create and

manage medical liability insurance to the property and casualty insurance companies and

reinsurers worldwide

Converys expanded its geographical presence through the acquisition

09/06/2017

Interactive Broadband Consulting Group (“IBB”) is a provider of consulting services for

broadband, mobility, media, and technology companies

IBB Consulting strengthened the ability of Accenture Strategy to advise clients in the

Communications, Media & Technology industries

Clearsight served as the exclusive strategic and financial advisor to IBB in this transaction

09/01/2017

GNC Group Consulting is a Melbourne-based retail consulting firm with operations in

Australia and south-east Asia

The merger with GNC Group Consulting allowed Grant Thornton Australia to provide its

retail clients with specialized advisory services including commercial finance, category

management, technology strategy, and property services

08/29/2017

(Healthcare Business)

The Advisory Board Company is a provider of consulting, research and technology

services to healthcare organizations and educational institutions

The Advisory Board Company’s healthcare business merged with OptumInsight in a ~$1.3

billion deal to provide greater strategic insights and operation value to Optum’s clients

08/28/2017

Blue Agility is a provider of Agile and Development & Operations (DevOps) consulting and

training services

The acquisition deepened cPrime’s Agile consulting and training practice and helped their

software development teams better incorporate Software Services Lifecycle Management

(SSLM) into their process to create accelerated flow of value delivery to customers

08/24/2017

Moss Adams, an accounting, consulting, and wealth management firm, merged with Hein

& Associates, a provider of corporate accounting and economic advisory services

The merger significantly strengthened the firms’ presence in the Western US

08/21/2017

herronpalmer is a provider of consulting services to employers on selecting, implementing,

and managing relationships with administration providers for HR and employee benefit

programs

The addition of herronpalmer helped Pacific Resources meet the growing demand among

large employers for independent, evidence-based advice

08/21/2017

(Benelux)

OC&C specializes in strategic consulting services for large and mid-market organizations,

private equity firms, governmental entities, and other public institutions

EY strengthened its organization with all 59 employees of OC&C Benelux, including 6

partners, joining EY’s Transaction Advisory Services to operate under the Parthenon-EY

brand

Q3 2017 Business Consulting M&A Transactions

CLEARSIGHT MONITOR | Business Consulting Industry | Q3 2017 5

Announced Target Buyer Target Description / Deal Rationale

08/18/2017

Clarion Capital Partners, a private equity firm, invested in AML RightSource, a provider of

AML/BSA and Financial Crimes compliance solutions

The partnership helped AML RightSource align more closely with its customers in the

banking, financial services, & online payments industries, pursue new customers, and

invest in its employees and internal infrastructure

08/10/2017

MTS Health Investors, a New York-based healthcare private equity firm, recapitalized

Medical Knowledge Group, an analytics-driven and technology-enabled multi-channel

healthcare marketing and communications provider servicing the biopharmaceutical

industry

08/10/2017

DataScore is a provider of consulting and growth marketing services to startups

The DataScore team helped Lyft scale growth for the on-demand ride app and improve

customer acquisition

08/09/2017

CrossResolve is a provider of government advisory and strategy services focused on

biometrics, forensics, and identity programs

KeyLogic Systems expanded their biometrics services through the acquisition

08/09/2017

Clinical Benchmarking is a healthcare consulting firm that specializes in guaranteed

expense reductions focused on physician preference items and facility reporting

With a strong history focused primarily on orthopedic and neurosciences supplies

management, Clinical Benchmarking broadened Pinnacle Healthcare Consulting’s

cardiovascular supply chain capabilities

08/08/2017

Envision Business Consulting is a provider of business consulting services to commercial,

government, and non-profit organizations

Strong-Bridge Consulting expanded their geographic footprint through the transaction

08/07/2017

Credo is a provider of management consulting services focused on corporate strategy,

transaction services, commercial & operating model transformation, and performance

improvement

Teneo Holdings acquired Credo as part of a major global expansion of its Teneo

Consulting operating division

08/03/2017

Brand Learning is a marketing and sales capability consultancy

The acquisition strengthened Accenture’s ability to help organizations drive sustained

customer-led growth by enhancing their marketing, sales, HR and leadership capabilities

07/27/2017

Baird Capital, the direct investment arm of Robert W. Baird & Co., acquired an interest in

Prescient Healthcare Group, a product strategy consultancy focused on the global

biopharmaceutical industry

07/25/2017

Anderson Corporate Solutions is a provider of life and health benefits consulting services

Risk Strategies expanded their employee benefits practice in the Southeastern US

through the acquisition

07/18/2017 MAYA Design is a design consultancy and technology research lab

The acquisition broadened BCG’s digital offerings and capabilities

Q3 2017 Business Consulting M&A Transactions

CLEARSIGHT MONITOR | Business Consulting Industry | Q3 2017 6

Announced Target Buyer Target Description / Deal Rationale

07/16/2017 AirTree Ventures led a $13 million capital raise for Expert360, an online platform that

connects businesses with global network of consultants for project based work

07/14/2017

Source8 is a provider of real estate, technology, and risk management consultancy

services to leading global corporations, with particular expertise in emerging markets and

complex environments

The acquisition strengthened Mitie Group’s existing service offering in both the UK and

overseas

07/13/2017

(Family Enterprise Business

Services Practice)

Headwaters SC is a provider of advisory and consulting services for business-owning

families and family offices

Ernst and Young acquired Headwaters SC’s Family Enterprise Business Services

Practice, expanding their Private Client Services Practice

07/12/2017

Vynamic is a management consulting firm exclusively focused on the healthcare industry

As a result of the $32mm acquisition, Vynamic joined UDG as part of their Ashfield

division; the acquisition is in line with Ashfield’s strategy to expand its advisory services

offering

Clearsight served as the exclusive strategic and financial advisor to Vynamic in this

transaction

07/11/2017

EQT Partners, an alternative investments firm, acquired Certara, a provider of technology-

driven decision support solutions for drug developments well as regulatory science,

writing, and submission management software and services for an enterprise value of

$850mm

07/10/2017

Gnarus Advisors is a provider of financial performance, risk management, and dispute

resolution consulting services

Nathan Associates enhanced their litigation services and solutions through the acquisition

07/10/2017 Group Benefits is a provider of employee benefits consulting services

Alera Group gained a strong presence in Memphis as a result of the transaction

07/10/2017

Portus Consulting is a provider of employee benefits programs consulting services and

software solutions

The acquisition of Portus supported Aon's ambitions to grow its UK employee benefits

business both organically and through acquisition

07/10/2017

Soyring Consulting is a provider of clinical and operational consulting assistance to

hospitals and healthcare facilities

The addition of Soyring’s capabilities expanded Press Ganey’s suite of consulting

solutions designed to help clients improve the overall safety, quality, and experience of

care

07/10/2017

Novia Strategies is a provider of consulting services to healthcare organizations

Novia Strategies’ skills and experience complemented GE Healthcare Camden Group in

several key areas, including care management transformation, workforce management,

non-labor cost reduction, and sustaining operating performance improvement

07/06/2017

CDG Group is a restructuring advisory, turnaround management, value enhancement,

and transaction advisory firm

The acquisition strengthened FTI Consulting’s restructuring service offering

Q3 2017 Business Consulting M&A Transactions

CLEARSIGHT MONITOR | Business Consulting Industry | Q3 2017 7

ABOUT US

Clearsight Advisors is a premier, independent investment bank dedicated to

providing world-class M&A and capital raising solutions exclusively to growth-

oriented Technology and Business Services companies. Clearsight combines

deep market insights across software, services and data. This market knowledge

combined with superior strategic and financial advice allows Clearsight to act as a

catalyst, enabling entrepreneurs, private equity owners and boards of directors to

successfully advance their vision. Clearsight Capital Advisors, Inc., a wholly

owned subsidiary, is a registered member of FINRA & SIPC. For more

information, please visit www.clearsightadvisors.com

CONTACT US

1650 Tysons Blvd., Suite 710

McLean, Virginia 22102

325 North St. Paul Street, Suite 3500

Dallas, TX 75201

703.672.3100

www.clearsightadvisors.com

@clearsightmb

Clearsight Advisors

We would like to thank all of our clients, colleagues and friends for helping to

reinforce Clearsight as the leader in advising high-end consulting firms